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Jack Newton, CEO and co-founder of Clio, poses for a photograph at the company's headquarters in Burnaby, B.C., on March 6, 2020DARRYL DYCK/The Globe and Mail

When the founders of Clio launched the beta version of their legal practice management software at the American Bar Association Techshow in 2008, the legal profession was in dire need of a technological makeover.

“Although many people think about the legal industry as high-flying lawyers working in the downtown skyscrapers in 1,000-person law firms, the reality is that 80 per cent of lawyers practice in firms of 10 lawyers or less and a full half of all lawyers practice solo,” says Jack Newton, CEO and co-founder of the Vancouver-based software-as-a-service company.

Most firms have precious few resources to dedicate to technology, data or even administration.

“The legal industry, as large and as important as it is, remained one of the last major industries to be fundamentally transformed by technology,” Mr. Newton says.

Clio, which operates under the legal name Themis Solutions Inc., was among the first companies to offer transformation with software that handles tasks including scheduling, billing, client intake and document management.

The response has been very good from industry and investors. Last September, Clio raised US$250 million in a Series D funding round from TCV and JMI Equity.

“The company has grown over the course of 12 years from just myself and [co-founder Rian Gauvreau] running the show and wearing all the hats to over 500 people in five offices worldwide today,” Mr. Newton says.

If the software has been valuable, the real-time data it provides has proven invaluable.

“That real-time environment is something that gives us an unbelievably powerful view on how our systems are being utilized by our customers,” Mr. Newton says.

Clio incorporates the data into the dozens of new versions of its software deployed every day.

The company has also leveraged that data to position itself a change leader, publishing an annual Legal Trends Report.

“We’re able to anonymize and aggregate the data we see across all of Clio and start to share some unique insights back with the legal industry in terms of where they’re performing well and where there are opportunities to leverage this data to improve their business,” Mr. Newton says.

For example, usage showed that in the U.S. the average lawyer was only billing 2.4 hours of time in a given day. It’s a “catastrophically low” utilization rate, Mr. Newton says.

Further research went into finding where the time was going, if not to billable work.

“It turns out, perhaps not surprisingly, that the majority of lawyers spend a huge amount of time on administrative tasks and a huge amount on client acquisition and marketing tasks, trying to find new clients, in some cases in very inefficient ways,” he says.

To help firms track performance, Clio recently launched a dashboard with real-time metrics for comparison to peer averages.

Arjun Ahluwalia, a principal at Argentum Law, says the firm uses Clio because it is secure, easy to use and offers the full functionality their international work requires. The platform saves team members time and energy spent on the “humdrum” aspects of practice, such as expenses, managing client portfolios, generating reports and invoices, Mr. Ahluwalia says.

“Given the platform is highly secure with layers of security gave us the confidence to give the platform a try,” he says.

Mr. Ahluwalia says the software has played an integral part of growth at Argentum, a Canadian-owned company licensed as a legal consultancy based in Fujairah Creative City, United Arab Emirates.

“When we first started with Clio it was just my partner Osman [Aboubakr] and myself, but fast forward a few years and we are now functioning in three continents with a deep bench of experienced lawyers between Toronto, New York, Houston, London and the UAE, all powered by and intimately connected through Clio,” Mr. Ahluwalia says.

Armed with the Clio app on their phones and a secure web-based portal, the firm’s lawyers are internationally mobile, he says.

“Ultimately, technology is changing the shape of lawyering,” Mr. Ahluwalia says. “Lawyers are increasingly untethered from fixed locations – today there are more internationally mobile generalists providing counsel across jurisdictions and they need secure and reliable technology to operate in such a manner.”

One of the early hurdles for Clio was convincing a risk-averse industry to embrace cloud technology.

Concerns about privilege and confidentiality were part of the issue, says Cristie Ford, a professor and associate dean of research and the legal profession at the Peter A. Allard School of Law at the University of British Columbia.

“I actually think the bigger challenges were structural barriers, regulatory structure, and culture within law firms,” Ms. Ford says.

At small- and medium-sized firms the problem is mostly time, she says.

“It’s become increasingly challenging to make a living doing ‘people’ law and working in a small firm. As a result, those lawyers just haven’t had the ability to lift their heads up and think about how tech could actually improve their business processes or their client service,” she says.

In large firms, the billable-hours model and the partnership model both discourage innovation, she says.

“That is exacerbated by a general culture of risk-avoidance and traditionalism and caution because, of course, that’s what you hire lawyers for,” Ms. Ford says.

The Canadian regulatory regime also makes it difficult for most to imagine new ways of serving clients.

“For the small firms, Clio has been a boon,” Ms. Ford says. “The more you can streamline the back-office stuff, the more time you can spend billing.”

The Canadian legal sector has been slower to adopt technology than, for example, those in the United Kingdom or the United States, she adds.

But things are changing with the advent of companies like Clio, Toronto-based Kira Systems with its machine-learning software, and Toronto-based Blue J Legal’s artificial intelligence-driven predictive platform. And new business models are emerging driven by a generational change in the legal sector and the clients it serves, Ms. Ford says.

“People are pushing to think about how to do things in a more tech-savvy way,” she says.

Positioning themselves as thought-leaders in the transformation, Clio’s founders have written white papers and spoken at hundreds of conferences. Mr. Newton founded the Legal Cloud Computing Association, which helped shape regulations early on. The company also holds an annual Clio Cloud Conference.

Last fall, Mr. Newton published the book The Client-Centred Law Firm, urging a major technological shift. Like Inc. in retail or Netflix Inc. in television, he envisions a transition from bricks-and-mortar firms to online services.

“Many consumers are starting to demand the same kind of effortlessness and the same level of technological sophistication from their lawyers that they do from other service providers,” Mr. Newton says.

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